In economics, there exists such a thing as an “ideal market,” usually defined as a market with perfect competition. Videogames can have those. (Real life, well, that’s a bit more contentions.)
Consider The Mall of Loathing. Yes, this is about that stick figure game again, bear with me for a second. The Market of Loathing is where players can trade with one another. You can offer items for sale, at a price of your choosing, and you can buy items by searching for them and receiving a list of offers, sorted by price. This system straightforwardly meets the conditions for “perfect competition.”
And we should also note that, in Kingdom of Loathing, the premium currency can actually be traded on the in-game market. You can purchase premium items with in-game money. Accordingly, the economy is a pretty big part of the game.
You know what’s also a big part of the game? Seasonal events! Particularly around Christmas, though it’s called Crimbo in-game. How’s that for a segue? Anyway, Crimbo 2018 was all about finding and hunting down stuff that’s needed to have Christmas happen, and there was a familiar to go along with that concept. (Familiars being in-game pets.)
So far so good, right? Now, this Yule Pup that Tammy gives you isn’t immediately bound to your account. Technically, the Yule Pup is an item that gives you the familiar, not the familiar itself. Once you use it, then you get a pet that you can’t trade anymore. And why would you? On Crimbo, nonetheless?
Astute players quickly realised that you could only ever get one of these per account. Even more astute players also noticed that it was flagged as “tradeable.” Now, this game has been around for a decade and a half, and it’s not a high priority for Asymmetric Publiations anymore, so the devs often forget to flag limited items as “non-tradeable.” They’ll be available for sale for a few hours, sometimes days, then locked down. A handful of players end up with five copies of “once-per-account” items and bragging rights. Elite traders (i. e. high-rollers (i. e. freemium whales)) assumed that this had happened, and prices started spiking.
Trade volume was relatively low, of course – most players who got a Yule Pup used it to participate in the event – but still: 141 transactions at an average price point of ~8 million meat is nothing to sneeze at. Meat is indirectly tied to USD via the item known as Mr. Accessory, which can be created by donating 10$ to the game, so this means over 300$ changed hands all in all.
And then… December 21st came.
And the Yule Pup became available for sale at an NPC store, introducing a hard price cap of 1 million.
The market reacted appropriately.
The price actually dropped below the 1,000,000 cap. There are good reasons for that – it’s possible to get discounts for NPC stores, so not everyone pays the full million, and you also can’t ever use more than one familiar of the same type. So the second one is literally worthless. So now you get to eat an additional loss if you want to get rid of those extra pups you speculated on.
Video games make for such fun case studies.